June 18, 2022 Weekly Investor Update

Life Bridge Capital Weekly Investor Update

June 18, 2022

The Latest in Commercial Real Estate (CRE), Economy & Markets





Mortgage Rate (30-Year Fixed): 5.78% (as of 6/16)


Existing Home Sales: -2.4% (April 2022)

New Residential Sales: -16.6% (April 2022)

Median Sales Price for New Houses Sold: $450,600 (April 2022)

Construction Spending: +0.2% MoM (April 2022)

New Residential Housing Starts: 1.72 million (April 2022)

New Residential Housing Completion: 1.3 million (April 2022)


Homeownership Rate: +65.4% (1Q22)

Rental Vacancy Rate: +5.8% (1Q22)


Sources: NAR, BLS, Federal Reserve Bank, MBA

Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.



10. Dallas remains top multifamily investment market

Since 2016, Dallas has sustained its top spot as the best metro for the multifamily investment market, according to a report by Colliers International. From January to April 2022, the city registered $8.2 billion in sales volume, eclipsing the entire Midwest’s values and almost equaling those of the Northeast. Multifamily property transactions in the Sun Belt area in Q122 were almost twice those from the same period three years ago.


9. Multifamily housing demand in the suburbs to keep growing

At the Westfair Communications’ “The Future of Real Estate” event  in White Plains, NY, Leonard Steinberg of property firm COMPASS admitted that the multifamily sector is “very under built” despite production being higher compared to two years ago. Steinberg believes, however, that multifamily housing demand in the suburbs will keep on growing. In addition, Amy Rose, CEO of Rose Associates, emphasized during the panel discussion that the transition to remote work has made suburban living more conducive, especially for those in the multifamily markets.


8. U.S. apartment renewal rate at the highest level in history

Kimberly Byrum, managing principal of real estate advisory firm Zonda, announced during an interview that the country’s apartment renewal rate of 58.3% in Q122 set a historic record. Renewals have been higher since the peak of the pandemic lockdowns because of limited available inventory and rising rental rates, according to Byrum. Apartment demand is sustained by a number of factors such as demographics, increased savings due to reduced expenses brought by limited mobility during the pandemic, a surge in household formations, increased migrations, and the higher cost of homeownership.


7. Rent growth in Florida boosts international investments in multifamily market

South Florida remains one of the tightest apartment markets in the country, according to Jeffrey Margolis, partner at Berger Singerman. The trend is influenced by the migration of more workers that has added to the growing population count. The multifamily market, however, continues to face challenges such as growing construction costs and supply chain issues that have also affected the rest of the country’s real estate development. Margolis opines that despite the higher rental rates in Florida, they are still relatively lower than other regions, including the Northeast. In addition, rental rates have not surged as much as the acceleration of home prices, thus making renting in apartment living more appealing than home ownership.


6. U.S. multifamily market continued unprecedented demand and rent growth

Asking rents across the country rose by $19 in May to a record-high $1,680, rising 3% QoQ and 13.9% YoY, according to a recent Yardi Matrix Multifamily Report. Miami (24.2%), Orlando (23.2%), and Tampa (21.6%) posted the highest gains among the 30 metros included in the study. Despite issues in economic growth and rising gas prices and inflation, the report emphasizes that it has not affected much of the multifamily demand or the rise in rents. 


5. Charlotte multifamily investment market set a record in 2021

Multifamily prices remain strong along with sales in Charlotte’s multifamily investment market, according to Northmarq. The city registered a record-high $6.4 billion in multifamily transactions in 2021, higher than the $3.5 billion in 2020 and $3.7 billion in 2019. Investments have been higher in the city this year since achieving a total of ten $100 million-plus transactions in 2021, with five of these deals already closed by April 2022. Northmarq also expects highly competitive bidding with the advantage among institutional, all-cash groups.


4. Home equity rose in Q122

CoreLogic released a report that indicates homeowners with mortgages experienced equity growth by 32.2% YoY. Collective equity gain hit $3.8 trillion in Q122, or an average gain of $63,600 per borrower. The company also added that almost 60% of properties in the nation are owned by homeowners with mortgages. This has led to the largest one-year gain in average home equity wealth for owners.


3. Migrations happened mostly in nearby areas

Analytics firm Placer.ai’s study on migration patterns during the pandemic found that while many people moved to suburban areas, the majority have “stayed close by in nearby towns, suburbs or neighboring enclaves.” The report added that almost 50% of the top 25 markets in terms of net growth from 2020 to 2022 are smaller markets with fewer than 500,000 residents. The trend has implications for real estate developers in terms of showcasing the need to uncover opportunities in areas that keep on attracting new residents.


2. Cincinnati, San Diego, New York among top metros with lowest apartment vacancy rates

Apartment Lists’s inaugural vacancy rate survey lists Cincinnati (3.0%), San Diego (3.1%) and New York (3.2%) as some of the top metros with the lowest vacancy rates in the country in May. Hartford tops the list with 2.9%, down from 4.3% YoY. Rents started hitting all-time records when the vacancy rate started falling in 2021 after more businesses went back to operations and stimulus money from the government was released. Some metros have increased vacancy rates however, which include Pittsburgh (+8.4%), San Antonio (+6.2%) and Minneapolis (+6.2%).


1. Main drivers of rising home prices identified by Freddie Mac

Home prices have risen across the U.S. by 33% since 2020, driven by low mortgage rates, limited supply and increased migration to the South and West, according to a report by Freddie Mac. The research stresses the impact of the COVID-19 pandemic in the migration from large cities. Freddie Mac’s data also reveal that as of February 2022, migration from the 25 largest cities has accelerated three times compared to pre-pandemic trends. With the 25-34-year-old demographic higher by 18% than the level in 2006, Freddie Mac predicts that this will continue to drive demand for multifamily and single-family housing.


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